4 Tips For Collecting Rent For Your Residential Property
If you own residential property, collecting rent is going to be one of your biggest responsibilities. While the last thing you probably want to do
Choose a Method for Collection
In order to increase the amount of tenants who pay their rent on time, give them options. If you only accept checks and money orders for rent, you may notice that this limitation makes it more difficult for some tenants to pay the rent. Your tenants have different lifestyles and work different shifts, so it helps to give them options. Here are some common methods for collecting rent:
- In Person – The most obvious way to collect rent is in person. Offer you tenants options for paying rent in person, including allowing them to pay with a personal check, money order, or even a cashier's check. If you have tenants with a history of bounced checks, it is a good idea to no longer allow checks and require money orders instead. Let your tenants drop off their rent money to the office manager, but also have a secure drop box just in case the manager is not in.
- Online – Many property management companies are now providing tenants with the option of paying online. This is very convenient and lets tenants use their credit or debit card. You can also set it up where they can only use a debit card or online bank account, and not allow regular credit cards to be used. In addition,
eChecksare a popular option for paying the rent online.
- By Mail – For some tenants, paying by mail is the preferred option. They might be away on a business trip or taking an extended vacation and are not able to bring the check in person. If they are somewhere without stable or secure Internet access, paying online might also not be an option. This is where the benefit of sending it by mail comes in.
Charge Late Fees
A good way to avoid having tenants pay their rent late every month is by charging a late fee. You will need to include this stipulation in the lease. When they sign the lease, they agree to pay a late fee when paying their rent. You can set the terms
Have a Strict Rent Collection Policy
Tenants that know they can pay the rent late, with or without a fee, will get into the habit of doing so. To avoid this, create a strict rent collection policy and stick to it. If you have told your tenants they will receive a 3-day notice to pay the rent or vacate if their rent isn't paid by the end of the day on the 1
Communicate When the Rent is Late
If you have a tenant that has not yet paid the rent and it is after the 1